Securities, Equity Securities, Debt Securities, Derivative Securities, Bonds, Treasury Bonds, Corporate Bonds, Mutual Funds

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Investment Analysis and Portfolio Management
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Securities
A financial security is document that is held to show that one is an owner of a company that is
listed in the stock exchange or is owed a part of the debt issue. They have a monetary value. In
recent years’ derivatives have also been emerging as a commonly used financial security.
Financial securities have the following features; First, is that they are easily tradable, that means
that they can easily be converted into cash Rosenbaum, J. and Pearl, J., (2018). Apart from
derivatives, securities allow the owner to own underlying asset without taking the physical
possession. Securities are categorized into three categories, derivative securities, equity
securities and debt securities.
1. Equity securities
An equity security is a form of interest in a company’s capital. Owning an equity security
signifies that one has contributed to the capital of the company. This share symbolizes monetary
value Ghysels, E., Idier, J., Manganelli, S. and Vergote, O., (2016). The owners of equity securities
have certain duties and rights that they are entitled to. Apart from being entitled to the
company’s profits they are also entitled to participate in the operations of the company through
exercising their right to vote. The shortcoming of this type of security is that in an instance
where the company is making losses, they get no return. Also, in cases of bankruptcy they are
on the losing end.
2. Debt Securities